You are considering a new product launch. The project will cost
$1,750,000, have a four-year life, and have no salvage value;
depreciation is straight-line to zero. Sales are projected at 220
units per year; price per unit will be $20,000, variable cost per
unit will be $13,000, and fixed costs will be $500,000 per year.
The required return on the project is 15 percent, and the relevant
tax rate is 34 percent.
a.
The unit sales, variable cost, and...